9/26/2008 @ 5:55PM

RIM Shares Teeter

Investors gave the Blackberry maker
Research In Motion
‘s stock the boot on Friday, after the company warned of product delays and delivered disappointing third-quarter guidance.

Research In Motion
shares closed the session down by $26.77, or 27.5%, at $70.76, as investors weighed weak margins against the company’s strong product pipeline.

Late Thursday, Research In Motion said second-quarter net earnings soared 72.0% but missed analysts’ estimates by a penny, at 86 cents a share. Sales came in as expected, at $2.6 billion (see “Product Delays Damage RIM“). Third-quarter estimates, however, were what really riled investors. Research In Motion expects a gross margin of 47.0%, missing the 50.0% that analysts were looking for and coming in well below the second-quarter’s 50.7%. The company’s third-quarter earnings guidance of 89 cents ato nd 97 cents a share were below the 98 cents that analysts have been expecting.

Citi Analyst Jim Suva downgraded the company to “hold” from “buy” on Friday, largely as a result of third-quarter guidance. Suva said that although the company plans to lower operating expenses, consumer spending is expected to slow even more, posing a threat to RIM since the handheld device market is slated to get even more competitive.

On the other hand, Steven Li, an analyst at Raymond James upgraded the stock to “outperform” from “market perform.” Li said smart-phone growth is expected to remain robust despite expectations of slow consumer spending.